9 GST Myths and their Reality

9 GST Myths and their Reality

Just two days into the GST implementation, confusion reigned supreme. Consumers and businesses were bombarded with messages on social media about double taxation on payments made using credit cards. But here to separate the fact from fiction, the government swung into action with Revenyue Secretary Hasmukh Adhia busting 7 myths about the new tax regime on Twitter. Here are some myths and the real facts that negate them, with respect to Goods and Services tax.

Fact: The Revenue Secretary who led the country's largest tax reform dispelled concerns that if a person is making payments using credit cards, for utility services, GST will be paid twice by him/her.

Myth#2 : GST is higher than VAT

Fact: India ushered in the GST regime on July 1, 2017. The four tier tax slab - 5, 12, 18 and 28% - was deducted keeping in mind that essential items such as unpacked food cereals, salt, healthcare are zero rated. Social media is awash with pictures of receipts in grocery stores or eateries comparing GST and VAT. Adhia clarified that higher GST appears to be so, because excise duty and other taxes earlier not visible are now subsumed under GST and apparent.

Myth#3 : GSTIN is critical for businesses.

Fact: To facilitate business operations,retailers and businesses can function under GST with provisional ID number and not wait for Taxpayer Identification System for GST or GSTIN. Provisional ID will also be the final GSTIN number.

Fact: Businesses can continue to function and get registered within 30 days.

Myth#6 : Invoice wise details need to be filled in return forms for small retailers.

Fact: Retailers have to file just one return as 2 other forms are auto generated by computer. So, 1 return has three parts, of which the first is filed by the dealer and two other parts are auto populated by the computer.

Myth#7 : Internet is essential for businesses under GST

Fact : Internet is not needed to do business under GST. Only while filing a monthly GST return will a stable connection be needed.

Myth#8 : GST is creating trouble for businesses

Fact: GST rollout has been sans any problem so far. Encouraging reports have been received from large restaurants, kirana stores departmental ships and roadside dhabas as well. All businesses have been working to effectively get acclimatised to the new tax regime.

Myth#9 : GST registration is extremely tough

Fact: Since 25 June, when the GSTN portal started fresh registration, 2.2 lakh new dealers underwent enrollment. Of these 63,000 have given complete details. 32,000 have received fresh registrations. Window for registration will remain open for 30 whole days. Those in retail business (B2C) need to file only summary of total sales.

So, GST has been rolled out with fanfare and as businesses and the common man adjust to the new tax realities, the government has been proactive in cutting down on the rumours. With the Revenue Department issuing notifications in press, social media and news sites, GST could well prove to be less taxing than critics have branded it.